H.B. No. 2358
AN ACT
relating to the exemption from certain registration and licensing
requirements and taxes for certain businesses and employees who
enter this state in response to a disaster or emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is
amended by adding Chapter 112 to read as follows:
CHAPTER 112. FACILITATING BUSINESS RAPID RESPONSE TO STATE
DECLARED DISASTERS ACT
Sec. 112.001. SHORT TITLE. This chapter may be cited as the
Facilitating Business Rapid Response to State Declared Disasters
Act.
Sec. 112.002. LEGISLATIVE FINDINGS. The legislature finds
that:
(1) during times of storm, flood, fire, earthquake,
hurricane, or other disaster or emergency, many Texas businesses
bring in resources and personnel from other states on a temporary
basis to expedite the often enormous and overwhelming tasks of
cleaning up, restoring, and repairing damaged buildings,
equipment, and property, and deploying and building new replacement
facilities in the state;
(2) accomplishing those tasks may necessitate
out-of-state businesses, including out-of-state affiliates of
Texas businesses, bringing into Texas resources, property, and
personnel that previously had no connection to Texas to perform
business activities in Texas, including repairing, renovating,
installing, and building, for extended periods of time;
(3) during those periods of time, out-of-state
businesses and employees performing business activities in Texas on
a temporary basis solely for the purpose of helping the state
recover from a disaster or emergency should not be burdened by any
requirements that the out-of-state businesses or employees pay
taxes as a result of performing those activities; and
(4) to ensure that out-of-state businesses may focus
on quickly responding to the needs of Texas and its citizens during
a disaster or emergency, it is appropriate for the legislature to
provide that those businesses and their employees are not subject
to certain state and local registration and licensing requirements
and taxes for performing business activities before, during, and
after the disaster or emergency to repair and restore devastating
damage to critical property and infrastructure in the state.
Sec. 112.003. DEFINITIONS. In this chapter:
(1) "Affiliate" means a member of a combined group as
that term is described by Section 171.1014, Tax Code.
(2) "Critical infrastructure" means equipment and
property that is owned or used by a telecommunications provider or
cable operator or for communications networks, electric
generation, electric transmission and distribution systems,
natural gas and natural gas liquids gathering, processing, and
storage, transmission and distribution systems, and water
pipelines and related support facilities, equipment, and property
that serve multiple persons, including buildings, offices,
structures, lines, poles, and pipes.
(3) "Declared state disaster or emergency" means a
disaster or emergency event that occurs in this state and:
(A) in response to which the governor issues an
executive order or proclamation declaring a state of disaster or a
state of emergency; or
(B) that the president of the United States
declares a major disaster or emergency.
(4) "Disaster- or emergency-related work" means
repairing, renovating, installing, building, rendering services,
or performing other business activities relating to the repair or
replacement of critical infrastructure that has been damaged,
impaired, or destroyed by a declared state disaster or emergency.
(5) "Disaster response period" means:
(A) the period that:
(i) begins on the 10th day before the date
of the earliest event establishing a declared state disaster or
emergency by the issuance of an executive order or proclamation by
the governor or a declaration of the president of the United States;
and
(ii) ends on the earlier of the 120th day
after the start date or the 60th day after the ending date of the
disaster or emergency period established by the executive order or
proclamation or declaration, or on a later date as determined by an
executive order or proclamation by the governor; or
(B) the period that, with respect to an
out-of-state business entity described by this paragraph:
(i) begins on the date that the
out-of-state business entity enters this state in good faith under
a mutual assistance agreement and in anticipation of a state
disaster or emergency, regardless of whether a state disaster or
emergency is actually declared; and
(ii) ends on the earlier of the date that
the work is concluded or the seventh day after the out-of-state
business entity enters this state.
(6) "In-state business entity" means a domestic entity
or foreign entity that is authorized to transact business in this
state immediately before a disaster response period.
(7) "Mutual assistance agreement" means an agreement
to which one or more business entities are parties and under which a
public utility, municipally owned utility, or joint agency owning,
operating, or owning and operating critical infrastructure used for
electric generation, transmission, or distribution in this state
may request that an out-of-state business entity perform work in
this state in anticipation of a state disaster or emergency.
(8) "Out-of-state business entity" means a foreign
entity that enters this state at the request of an in-state business
entity under a mutual assistance agreement or is an affiliate of an
in-state business entity and:
(A) that:
(i) except with respect to the performance
of disaster- or emergency-related work:
(a) has no physical presence in this
state and is not authorized to transact business in this state
immediately before a disaster response period; and
(b) is not registered with the
secretary of state to transact business in this state, does not file
a tax report with this state or a political subdivision of this
state, and does not have a nexus with this state for the purpose of
taxation during the tax year immediately preceding the disaster
response period; and
(ii) enters this state at the request of an
in-state business entity, the state, or a political subdivision of
this state to perform disaster- or emergency-related work in this
state during the disaster response period; or
(B) that performs work in this state under a
mutual assistance agreement.
(9) "Out-of-state employee" means an employee who
enters this state to perform disaster- or emergency-related work
during a disaster response period. The term does not include a
security guard or other employee whose primary function is to
provide security services or an employee whose primary function is
to install or repair heating or cooling equipment.
Sec. 112.004. EXEMPTION OF OUT-OF-STATE BUSINESS ENTITY
FROM CERTAIN OBLIGATIONS DURING DISASTER RESPONSE PERIOD.
Notwithstanding any other law and except as provided by Section
112.006, an out-of-state business entity whose transaction of
business in this state is limited to the performance of disaster- or
emergency-related work during a disaster response period is not
required to:
(1) register with the secretary of state;
(2) file a tax report with or pay taxes or fees to this
state or a political subdivision of this state;
(3) pay an ad valorem tax or use tax on equipment that
is brought into the state by the entity, used only by the entity to
perform disaster- or emergency-related work during the disaster
response period, and removed from the state by the entity following
the disaster response period;
(4) comply with state or local business licensing or
registration requirements; or
(5) comply with state or local occupational licensing
requirements or related fees.
Sec. 112.005. EXEMPTION OF OUT-OF-STATE EMPLOYEE FROM
CERTAIN OBLIGATIONS DURING DISASTER RESPONSE PERIOD.
Notwithstanding any other law and except as provided by Section
112.006, an out-of-state employee whose only employment in this
state is for the performance of disaster- or emergency-related work
during a disaster response period is not required to:
(1) file a tax report with or pay taxes or fees to this
state or a political subdivision of this state; or
(2) comply with state or local occupational licensing
requirements or related fees, if the employee is in substantial
compliance with applicable occupational licensing requirements in
the employee's state of residence or principal employment.
Sec. 112.006. TRANSACTION TAXES AND FEES. An out-of-state
business entity whose transaction of business in this state is
limited to the performance of disaster- or emergency-related work
during a disaster response period or an out-of-state employee whose
only employment in this state is for the performance of disaster- or
emergency-related work during a disaster response period is subject
to a transaction tax or fee, including a motor fuels tax, sales or
use tax, hotel occupancy tax, and the tax imposed on the rental of a
motor vehicle, that is imposed in this state, unless the entity or
employee is otherwise exempt from the tax or fee.
Sec. 112.007. NOTIFICATION PROCEDURES. (a) If requested
by the secretary of state, an out-of-state business entity shall
provide to the secretary of state a statement that the entity came
to this state for the purpose of performing disaster- or
emergency-related work during a disaster response period and that
includes:
(1) the entity's name;
(2) the entity's jurisdiction of formation;
(3) the address of the principal office of the entity;
(4) the entity's federal tax identification number;
(5) the date that the entity entered the state; and
(6) contact information for the entity.
(b) If requested by the secretary of state, an in-state
business entity shall provide to the secretary of state, along with
the in-state business entity's contact information, the
information listed in Subsection (a) for any affiliate of the
in-state business entity that entered the state as an out-of-state
business entity.
(c) The secretary of state shall keep records of and make
available to the public any statements or information provided to
the secretary of state under this section.
Sec. 112.008. OBLIGATIONS OF OUT-OF-STATE BUSINESS
ENTITIES AND EMPLOYEES AFTER DISASTER RESPONSE PERIOD. An
out-of-state business entity or out-of-state employee who remains
in this state after a disaster response period is not entitled to
any exemptions from obligations provided by this chapter.
Sec. 112.009. REGULATIONS. The secretary of state shall
adopt regulations, including developing any necessary forms or
processes, to implement this chapter.
SECTION 2. (a) Subchapter B, Chapter 151, Tax Code, is
amended by adding Section 151.0241 to read as follows:
Sec. 151.0241. PERSONS PERFORMING DISASTER- OR
EMERGENCY-RELATED WORK. (a) In this section, "disaster- or
emergency-related work," "disaster response period," and
"out-of-state business entity" have the meanings assigned by
Section 112.003, Business & Commerce Code.
(b) An out-of-state business entity is not engaged in
business in this state for purposes of Sections 151.107 and 151.403
or any other provision of this chapter applicable to a person
engaged in business in this state if the entity's physical presence
in this state is solely from the entity's performance of disaster-
or emergency-related work during a disaster response period.
(b) Section 151.0241, Tax Code, as added by this section,
does not affect tax liability accruing before the effective date of
this Act. That liability continues in effect as if this Act had not
been enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2015.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2358 was passed by the House on May 4,
2015, by the following vote: Yeas 141, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2358 was passed by the Senate on May
22, 2015, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor